[ Note: This is a part of my series--please click on link to see all posts tagged in this series--How Social Business Leaders Lead, focusing on how leaders of existing social businesses are evolving their own skills, along with their views of future models of work, the evolving nature of management, and the evolving structure of the organization.]

In 1989 Jon launched his first company, Goldmine, with one of the earliest products in the space between collaboration, contact management and sales force automation. This was at a time when most companies were just getting used to the idea of local area networks (yes, with wires) as a business staple. It helps to see why CRM 1.0 fell behind and what it became to understand the difference with where it is now because of social business.

In the early 1990s – it still scares me to think that was overtwo decades ago – I was in the PC-to-Unix connectivity business, in the days when Novell was still called ‘Big Red’ and a top competitor to Microsoft with its Netware workgroup networking products. I met up with Jon Ferrara in his hometown of Santa Monica, California to understand the evolution of CRM from someone who had experienced it first-hand.

Before Dropbox, LinkedIn, Hootsuite, Hubspot, and the many social business tools to connect, share and collaborate across your business functions, people were concerned with a more basic question: how do I access my files on another machine?

If you were in sales operations, it was how to keep a customer proposal somewhere that had more than the 20MB of storage on your desktop computer; maintaining forecasting numbers on a Visicalc spreadsheet on a non-graphical user interface; and if you were lucky, email to your peers, employees or managers to ask, beg and plead for customer information across the company.

Sharing was still a strange idea. Most of the network access was more to have access to large storage space, which was typically broken up and distributed across employees as separate areas. There wasn’t really as much actual sharing in file sharing, between people at the time.

Jon had a different idea: what if there was a single application that could, as a team, manage customer records, manage calendars, track sales interactions, and even be used to track and forecast sales, and generally become a common sales and marketing automation system? After some years in different field and sales management roles at Banyan software, at the time a top competitor to Novell and Microsoft, he launched a startup in 1989 at age 27 with $3000.

Rawn Shah: “Can you tell me about how companies at the time viewed this new category of products?”

Jon Ferrara: “We were the first to the market with a unique product before its time. We had a networked business application before people know what the network was for, and we were trying to teach people how to nurture and build relationships as a team when they were still used to being the lone gun; and to market automation, sales pipeline processing and collaboration.

We had to educate the market, and at the same time, we didn't have any money. We started the company with $3000. We had to scale the company. What I did is I learned lessons at Banyan. We [Banyan] got our butts kicked by Novell. Banyan had a great solution but they sold at the top through direct salespeople. It was a complex and expensive with a long roll out. There was this little company called Novell that had a workgroup solution that was affordable, easy to get started with, and sold through resellers. It was like a Trojan Horse into the corporation. People bought it in workgroups.

So what I did, is [that] I went after the Novell resellers, because they [had already] laid the network highway. I called up every Novell reseller in the country, one by one, and I shared my story about the power of engagement, customer relationships, sales automation, and collaboration, tying together content calendar and communication into one cohesive platform and integrating sales, marketing and support. I got them to use it, because people sell what they know and they know what they use. Eventually, they started recommending it to their customer base and that was the foundation of Goldmine. We used guerrilla marketing and PR to tell the story and scale the company. ”

[Note:

GoldMine Software during Jon’s tenure was awarded “Editor’s Choice’ by PC Magazine several years (1993, 1995-1997), and was ranked 154th on the 1997 Inc. 500. Goldmine CRM continues to win awards. ]

JF: “If you think about it, contact managers are what empowered and enchanted the line-level business people. It enabled them to build relationships and work as a team through those relationships. But management was fearful. They were fearful that salespeople would walk out the door with the contacts. They were fearful that the salesperson wouldn't do what they were supposed to do. They didn't trust them. And they wanted a pipeline forecast [so] they can figure out future growth. So CRM was then invented…

That was … the Golden Era of engagement and relationship management, workgroup/contact management, [and sales force automation]. CRM evolved from that. In many respects, CRM [transformed into something just] for line management and they forgot the sales guys.

When we invented Goldmine, it was not [just] about the sales guy, it was really about [the whole] team, the whole company… I believe that everybody in the company is part of the relationship and should be sharing [it]. I started out as an [sales engineer, so] I know the power of effective pre or post-sale customer service. … The product guys have to be involved in the conversation so they can improve the product.